Student Debt At $1.6 Trillion

Paying off the $1.6 trillion bill for higher education could take U.S. borrowers a lifetime

- Shahien Nasiripour, with David Ingold

The Wilsons are hardly the kind of couple you’d expect to find locked in a latter-day debtors’ prison. Jon works as a manager for an online transcription business. Vicky is a digital marketer for a semiconductor company. They’re both 37, and together the Austin couple makes more than $150,000 annually.

The Wilsons owe $260,000 in student loans for college and a pair of master’s degrees for Vicky. Even worse, though they’re meeting their $1,300 in required monthly payments, their balance has remained roughly the same over the past year because Vicky’s outlay doesn’t cover all the interest on her loans. For all their education and career success, the Wilsons can’t envision repaying their school debts—ever. And forget about buying a home or opening a college fund for their 3-year-old son. “We don’t even think about it,” Jon says.

It’s no secret that America’s young adults will take a long time to pay off their student loans. But few know that this generation of borrowers is chipping away at their debt so slowly that some may not escape it until they’re dead.

That’s the grim assessment of a new Bloomberg Businessweek analysis, which found that U.S. student loan borrowers as a group are paying down about 1% of their federal debt every year. It’s as if a former student were reducing the balance of a typical $30,000 college loan by only $300 annually. At that rate, it’s almost unthinkable how long it would take to repay the government: a century.